Sanctions are reportedly hurting Russia's economy and Ukraine war aims, and new oil caps could hit harder

Russian President Vladimir Putin claimed for months that Western-led sanctions imposed over his invasion of Ukraine had failed, but even he now seems to recognize the economic fallout on Russia's economy and war effort. "Recent figures show the situation has worsened considerably since the summer when, buoyed by a steady stream of oil and gas revenue, the Russian economy seemed to stabilize," The Washington Post reports, citing economists, Russian business executives, and official Russian statistics showing steep drops in non-oil tax revenue and retail sales.
"All objective indicators show there is a very strong drop in economic activity," Vladimir Milov, an dissident former Russian deputy energy minister, tells the Post. "The spiral is escalating, and there is no way out of this now."
"The Western ban on technology imports is affecting most sectors of the economy, while the Kremlin's forced mobilization of more than 300,000 Russian conscripts to serve in Ukraine, combined with the departure of at least as many abroad fleeing the draft, has dealt a further blow," the Post reports. Putin has also effectively cut natural gas production by limiting exports to Europe.
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
Moscow's oil revenue could take a further hit when the European Union bans most Russian crude imports and, with the U.S. and other allies, impose price controls on most Russia oil exports by limiting shipping, trading, insuring, and financing Russian oil shipments anywhere that agrees to pay more than a set price. Those combined measures, set to take effect Dec. 5, could deprive Russia of at least $120 million per day in lost revenue, Milov told the Post.
But the damage to Russia will be determined by how low the EU and U.S. set the price cap, how Russia responds, whether OPEC+ cuts crude production, and how soon China's depressed demand for oil recovers after COVID-19 lockdowns, The Wall Street Journal reports. Russia has already cut its oil prices to entice wary buyers.
And U.S. sanctions, combined with Ukraine's "courage and ingenuity," have already made a "real difference" on Russia's ability to conduct its war in Ukraine "in any modern terms," U.S. Ambassador Jim O'Brien, head of the State Department's Office of Sanctions Coordination, told CNN on Sunday. "You see the communications are lacking. Precision weapons. Rapid movement of troops. So it's fighting a different kind of war," with vastly scaled-back ambitions.
Sign up for Today's Best Articles in your inbox
A free daily email with the biggest news stories of the day – and the best features from TheWeek.com
Peter has worked as a news and culture writer and editor at The Week since the site's launch in 2008. He covers politics, world affairs, religion and cultural currents. His journalism career began as a copy editor at a financial newswire and has included editorial positions at The New York Times Magazine, Facts on File, and Oregon State University.
-
Today's political cartoons - May 6, 2025
Cartoons Tuesday's cartoons - rare earth minerals, rising prices, and more
-
What to know about Real IDs, America's new identification cards
The Explainer People without a Real ID cannot board a commercial flight as of May 7, 2025
-
Where is the left-wing Reform?
Today's Big Question As the Labour Party leans towards the right, progressive voters have been left with few alternatives
-
Warren Buffet announces surprise retirement
speed read At the annual meeting of Berkshire Hathaway, the billionaire investor named Vice Chairman Greg Abel his replacement
-
Trump calls Amazon's Bezos over tariff display
Speed Read The president was not happy with reports that Amazon would list the added cost from tariffs alongside product prices
-
Markets notch worst quarter in years as new tariffs loom
Speed Read The S&P 500 is on track for its worst month since 2022 as investors brace for Trump's tariffs
-
Tesla Cybertrucks recalled over dislodging panels
Speed Read Almost every Cybertruck in the US has been recalled over a stainless steel panel that could fall off
-
Crafting emporium Joann is going out of business
Speed Read The 82-year-old fabric and crafts store will be closing all 800 of its stores
-
Trump's China tariffs start after Canada, Mexico pauses
Speed Read The president paused his tariffs on America's closest neighbors after speaking to their leaders, but his import tax on Chinese goods has taken effect
-
Chinese AI chatbot's rise slams US tech stocks
Speed Read The sudden popularity of a new AI chatbot from Chinese startup DeepSeek has sent U.S. tech stocks tumbling
-
US port strike averted with tentative labor deal
Speed Read The strike could have shut down major ports from Texas to Maine